HUD Seeking Public Comment on Tougher Standards for FHA Borrowers

For the next 30 days HUD is looking for public comment on three policy changes, each of which make it more difficult for borrowers to qualify for FHA loans.  These changes are designed to reduce the risk and increase FHA’s capital reserve.

1. Update the combination of credit and down payment requirements for new borrowers. New borrowers seeking FHA loans will be required to have a minimum FICO score of 580 to qualify for FHA’s leading 3.5% down payment program.  Borrowers with credit scores of less than 580 will be required have a cash investment of 10%.  Borrowers with credit scores of less than 500 will no longer qualify for an FHA insured mortgage.
2. Reduce seller concessions from 6% to 3%.
3. Tighten underwriting standards for manually underwritten loans.

To read the complete notice click here

You can make your voice heard by submitting a comment to HUD by clicking here

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